TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Jim Shannon
SUBJECT: See Below DATE: October 5, 2026
Approved Date:
10/16/26
COUNCIL DISTRICT: Citywide
SUBJECT: Adoption of an Ordinance Ratifying Final Expenditures in Various Appropriations for 2025-2026 and Adoption of the Associated Appropriation Ordinance and Funding Sources Resolution
Amendments in 2025-2026
RECOMMENDATION
(a) Adopt an ordinance ratifying final 2025-2026 expenditures in various appropriations as detailed in this report.
(b) Adopt the following 2025-2026 Appropriation Ordinance amendments in the General Fund:
(1) Increase the Workers’ Compensation Claims – Fire appropriation to the Fire Department by $310,379;
(2) Increase the Workers’ Compensation Claims – Parks, Recreation and Neighborhood Services appropriation to the Parks, Recreation and Neighborhood Services Department by $89,021;
(3) Decrease the Workers’ Compensation Claims – Police appropriation to the Police Department by $310,379; and
(4) Decrease the Workers’ Compensation Claims – Other Departments appropriation to the Human Resources Department by $89,021. (c) Adopt the following 2025-2026 Appropriation Ordinance and Funding Sources Resolution amendments in the Construction Tax and Property Conveyance Tax Fund: Parks Purposes Central Fund:
(1) Increase the Construction and Conveyance Tax revenue estimate by $142,348;
(2) Increase the Needs-Based Allocation Transfer to District 1 by $10,560; (3) Increase the Needs-Based Allocation Transfer to District 2 by $8,922; (4) Increase the Needs-Based Allocation Transfer to District 3 by $6,914; (5) Increase the Needs-Based Allocation Transfer to District 4 by $5,501; COUNCIL AGENDA: 10/27/26
FILE: 26-1105
ITEM: 2.9
HONORABLE MAYOR AND CITY COUNCIL
October 5, 2026
Subject: Ratification of Final 2025-2026 Expenditures in Various Appropriations
(6) Increase the Needs-Based Allocation Transfer to District 5 by $9,262; (7) Increase the Needs-Based Allocation Transfer to District 6 by $5,407; (8) Increase the Needs-Based Allocation Transfer to District 7 by $9,531; (9) Increase the Needs-Based Allocation Transfer to District 8 by $8,654; (10) Increase the Needs-Based Allocation Transfer to District 9 by $8,306; (11) Increase the Needs-Based Allocation Transfer to District 10 by $6,842; (12) Increase the Transfer to the Parks City-Wide Construction and Conveyance Tax Fund appropriation by $40,947; and
(13) Increase the Transfer to the General Fund – Parks Eligible Maintenance Costs appropriation by $21,502.
(d) Adopt the following 2025-2026 Appropriation Ordinance amendments in the Water Utility Fund:
(1) Increase the Workers’ Compensation Claims appropriation to the Human Resources Department by $22,884; and
(2) Decrease the Unrestricted Ending Fund Balance by $22,884.
SUMMARY AND OUTCOME
The recommended actions account for unanticipated appropriation over-expenditures that occurred at the end of 2025-2026 and allow the final financial accounting on a budgetary basis for 2025-2026 to be completed.
BACKGROUND
As part of the process of completing the 2025-2026 fiscal year-end audit, final expenditures and encumbrances recorded by the Finance Department have been compared to the budget to determine whether the expenditures were within appropriation levels approved by the City Council. In this report, City Council approval is requested for a small number of appropriation increases necessitated because final 2025-2026 expenditure totals exceeded final modified appropriation levels.
ANALYSIS
As part of the year-end closing process, certain expenses not previously anticipated are recorded and cause appropriations to be exceeded. Under the City's current practice, appropriation increases necessary to fund those expenses require City Council ratification action. The Administration makes every effort to limit the number of instances where after-the-fact ratification of over-expenditures must occur. As has been the practice in the past, year-end budget adjustments were prepared and brought to City Council by the City Manager’s Budget Office in June 2026 for the 2025-2026 fiscal
HONORABLE MAYOR AND CITY COUNCIL
October 5, 2026
Subject: Ratification of Final 2025-2026 Expenditures in Various Appropriations
year. A number of potential overruns were avoided as a result of the actions taken in that document.
The Administration manages approximately 1,500 appropriations allocated to approximately 150 budgeted City funds. In 2025-2026, appropriations were exceeded in three City funds as described in the attachment to this memorandum. The total amount for the three funds involved is $564,632 and includes the following:
- Expenditure appropriations in the General Fund related to the Workers’ Compensation Claims – Fire appropriation ($310,379) and Workers’ Compensation Claims – Parks, Recreation and Neighborhood Services Department appropriation ($89,021) due to higher than anticipated claims settlement costs;
- Transfer appropriations in the Construction Tax and Property Conveyance Tax Fund: Parks Purposes Central Fund ($142,348) that allocates excess Construction and Conveyance Tax receipts in accordance with the City Councilapproved distribution formula; and - Expenditure appropriation in the Water Utility Fund related to the Workers’ Compensation Claims appropriation to the Human Resources Department ($22,884) due to higher than anticipated claims settlement costs.
EVALUATION AND FOLLOW-UP
The ratification of exceeded appropriations will be incorporated into the City's Annual Comprehensive Financial Report for 2025-2026.
FISCAL IMPACTS
As discussed in the Attachment - 2025-2026 Ratification Descriptions, additional revenue and expenditure savings are available to offset the exceeded appropriations for 2025-2026.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the Finance Department.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the October 27, 2026 City Council meeting.
HONORABLE MAYOR AND CITY COUNCIL
October 5, 2026
Subject: Ratification of Final 2025-2026 Expenditures in Various Appropriations
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action
CEQA
Not a Project, File No. PP17-004, Government Funding Mechanism or Fiscal Activity with no commitment to a specific project which may result in a potentially significant physical impact on the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
JIM SHANNON
Budget Director
I hereby certify that there was available for appropriation in the following funds in fiscal year 2025-2026 moneys in excess of those heretofore appropriated therefrom, said excess being at least the amounts as set forth below:
Construction Tax and Property Conveyance Tax
Fund: Parks Purposes Central Fund
$142,348
JIM SHANNON
Budget Director
For questions, please contact Jim Shannon, Budget Director, at [email protected].
ATTACHMENT:
2025-2026 Ratification Descriptions
ATTACHMENT
2025-2026 RATIFICATION DESCRIPTIONS
General Fund $399,400
Adjustments are necessary in the General Fund to account for overexpenditures related to the Workers’ Compensation Claims – Fire Department appropriation ($310,379) and the Workers’ Compensation Claims – Parks, Recreation and Neighborhood Services Department appropriation ($89,021) due to higher than anticipated claims settlement costs, including claims involving ongoing and future medical treatments.
Corresponding decreases to the Workers’ Compensation Claims – Police appropriation ($310,379) and Workers’ Compensation Claims – Other Departments appropriation ($89,021) are recommended to offset these over-expenditures, realizing savings from amounts budgeted to the Police Department and Human Resources Department for workers’
compensation claims.
Construction Tax and Property Conveyance Tax Fund: Parks Purposes Central Fund
$142,348
As a result of higher than anticipated revenues, a technical adjustment is necessary to account for over-expenditures that occurred in the Transfer appropriations in the Construction and Conveyance Tax Fund – Parks Purposes Central Fund ($142,348) that is allocated for parks and community facilities development. The Construction and Conveyance Tax revenue is received in the Construction and Conveyance Tax Fund – Parks Purposes Central Fund and then distributed to other various Parksrelated Construction and Conveyance Tax Funds (i.e., City-Wide and Council District Funds) as well as the General Fund based on the City Council-approved distribution formula. Because Construction and Conveyance Tax Fund revenue ended the year slightly above the budgeted level, the transfer appropriations that were used to distribute this revenue to the other funds were also exceeded. Funding allocated for these ratification actions is offset by additional Parks Construction and Conveyance Tax Fund revenue.
Water Utility Fund $22,884
An adjustment is necessary in the Water Utility Fund to account for overexpenditures related to the Workers’ Compensation Claims appropriation to the Human Resources Department ($22,884) due to higher than anticipated claims settlement costs, including claims involving ongoing and future medical treatments. The offsetting adjustment to this overexpenditure is a decrease to the Unrestricted Ending Fund Balance.
TOTAL $564,632